What Xerox said
"The current global health crisis and resulting macroeconomic and market turmoil caused by COVID-19 have created an environment that is not conducive to Xerox continuing to pursue an acquisition of HP Inc.," Xerox said in a late-Tuesday press release. "Accordingly, we are withdrawing our tender offer to acquire HP and will no longer seek to nominate our slate of highly qualified candidates to HP's Board of Directors."
Xerox assured investors that a combination with HP still makes a ton of strategic sense, but HP's board of directors never accepted the proposal, and it seems silly to continue the push in the middle of a global health crisis.
What HP said
HP was quick to issue a response. The company expressed no regrets about dodging Xerox's takeover bid.
"HP is a strong company with market leading positions across Personal Systems, Print, and 3D Printing & Digital Manufacturing," HP said. "We have a healthy cash position and balance sheet that enable us to navigate unanticipated challenges such as the global pandemic now before us, while preserving strategic optionality for the future."
Xerox is going back to the drawing board, focusing on crafting an effective response to the COVID-19 crisis above all else. And $24 billion of financial commitments from a consortium of banks will not be needed now, though Xerox may come knocking again with a different buyout target in mind.
The board of directors has made it clear that mergers and acquisitions have become a major driver of Xerox's growth plans, and the company clearly isn't afraid to chase some very large prey. Let me remind you that HP's market cap was 6.3 times Xerox's on Tuesday.
HP gets to sit back and disconnect from the buyout defense, which included a "poison pill" policy and a massive commitment to share buybacks. I wouldn't be surprised to see HP's $15 billion buyback authorization sitting mostly unused as the coronavirus crisis plays out, even though share repurchases actually make a lot of sense when share prices are low.